FCC’s 2023 Farmland values Report was released on Tuesday. With little surprise to those in the industry, results show Ontario's farmland market experienced notable growth in 2023, with average values for cultivated land increasing by 10.7%, as detailed in the Farm Credit Canada 2023 Farmland Values Report. This uptick in farmland values, though significant, was a deceleration from the sharper increases of 19.4% in 2022 and 22.2% in 2021. The moderation in growth rates can be attributed to factors such as heightened interest rates and lower commodity prices, which dampened interest in farmland acquisitions. Despite a reduced number of bidders for available properties, the demand for quality land, particularly those adjacent to established operations, remained strong. This demand diversity—spanning from large intensive supply-managed farm operations to cash crop producers, part-time farmers, and investors—highlights the dynamic nature of Ontario's agricultural real estate market.
The percentage differences between the low and high values of the Value range per acre for farmland across Ontario's regions dramatically illustrate the wide ranges within each area. These differences, expressed as percentages, underscore the variability in land values and the important role of skilled farm appraisers:
(1) Northern: 850%
(2) Eastern: 170.6%
(3) Mid Western: 102.9%
(4) Central East: 258.8%
(5) South West: 178%
(6) Central West: 95.2%
(7) Southern: 144.6%
(8) South East: 150%
The Northern region exhibits the most substantial variability, with an 850% difference between its low and high Value range per acre, indicating a vast range of land values within the region. Conversely, the Central West region shows the smallest percentage difference, at 95.2%, which, while smaller relative to others, still represents significant variability.
These percentages highlight the complexity and diversity of farmland values within Ontario, underscoring the importance of having a skilled farm appraiser. An appraiser's expertise is invaluable in accurately assessing land value, taking into account the myriad factors that influence these figures, from soil quality and location to market demand and agricultural potential. These wide ranges demonstrate the necessity for thorough, informed appraisals to ensure fair and equitable agricultural valuations.
Did you miss the Farm Tax Update for 2024 last week?
Get the latest from OFA’s latest virtual webinar recording
Topics covered:
1. The new January 1, 2024, intergenerational transfer rules for shares of a family farm or qualified small business corporation
2. New trust reporting rules
3. UHT update
PS:
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DISCLAIMER: The predictions of farmland values for the upcoming year presented in this newsletter are solely the opinions of S.W. Irvine & Associates. These opinions are for general information purposes only and should be regarded as such. They are based on our analysis of current market trends and historical data, but they do not constitute guarantees of future performance. S.W. Irvine & Associates, is not legally bound by these opinions, and they should not be used as the sole basis for any financial decisions.
For individuals or entities with a more vested interest in the precise value of specific properties, S.W. Irvine & Associates offers professional appraisal services. Our team of experts can provide a detailed, property-specific analysis to help you make informed decisions. For more information please contact us at farms@swiappraisals.com | 519-763-5956 or submit your appraisal request here.
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